The Cook County Board of Commissioners on Tuesday unanimously passed legislation that aims to protect employee wages and force businesses to more closely follow labor laws.
Under the ordinance, companies or business owners found guilty of wage theft are barred for five years from obtaining Cook County procurement contracts, business licenses or property tax incentives. Also, companies pursuing business with the county will now have to certify compliance with federal and state wage and labor laws.
"[Wage theft] is unfair to hard-working employees and their families and it's unfair to competing businesses which are operating within the confines of the law," said Cook County Board President Toni Preckwinkle, shortly after Tuesday's vote. "The legislation passed today will make Cook County a national leader targeting wage theft."
Examples of wage theft include failing to pay overtime, classifying legal employees as independent contractors or paying employees less than the minimum wage.
Preckwinkle, who co-sponsored the ordinance with Commissioner Jeffrey Tobolski, said Cook County is now the nation's largest county to pass wage theft legislation.
Tobolski said the legislation was inspired by alleged wage theft at U.S. magazine wholesaler Source Interlink Distribution, which closed its doors in May 2014 and left about 6,000 workers nationwide, including more than 250 in Illinois, unemployed. That next month, Source Interlink Distribution's parent company Source Home Entertainment LLC filed for Chapter 11 bankruptcy protection.
"This company had an obligation to let its workers know of the shutdown 60 days in advance, but failed to do so ... From that conversation we began dialogue with President Toni Preckwinkle, who has been tremendously supportive of our legislation," Tobolski said.
Source Interlink Distribution's former workers and their allies at Arise Chicago maintain that the company failed to give the employees notice about the layoffs 60 days before closing the facility, which is a requirement for employers in certain situations under the federal and Illinois Workers Adjustment and Retraining (WARN) Act.
Shortly thereafter, Source Interlink Distribution was hit with a class action lawsuit filed by its former employees in U.S. District Court in Fort Myers, Florida due to the alleged WARN Act violations.
The company settled for $675,000, which the courts approved in December, according to Mary Olsen, an attorney representing the plaintiffs named in the lawsuit.
Olsen estimated that the settlement would be funded by the end of March and added that workers' individual disbursements would be based on what each employee's final wage rate was at the time of the layoffs.
Tobolski said the new Cook County ordinance should deter companies from committing similar acts of alleged wage theft in the future.
"This ordinance is the most comprehensive anti-wage theft legislation at the local level and in the United States," he said.
According to Adam Kader, director of Arise Chicago's Worker Center, the county's anti-wage theft ordinance is more "comprehensive" than the city's because, among other things, it extends the law beyond city limits to areas of unincorporated Cook County.
The Chicago City Council unanimously passed anti-wage theft legislation in 2013, holding employers in the city accountable if found guilty of violating wage and labor laws.
Kader said wage theft is "very prevalent here in Chicago, as well as the county at large." Arise Chicago cites a 2010 University of Illinois at Chicago study that estimated workers in Cook County lose more than $7.3 million every week because of wage theft.
Here's more from Kader during Tuesday's press conference:
Angelina Landaverde, 38, who worked at Source Interlink Distribution's facility in McCook for 17 years, referred to the ordinance's passage as a "victory for workers across the country."
"What happened to me was a tragedy for me and my 200 coworkers," she said, adding that she felt the impact of the closure "deeply" because she had other family members working at the facility and was pregnant with her daughter at the time.
"This [ordinance] means the struggle of my coworkers and I was not in vain," Landaverde said.